On 27 February, President Edgars Rinkēvičs signed and submitted to the Presidium of the Saeima a draft law “Amendment to the Law on Financing National Defence”, proposing to enshrine in the Law on Financing National Defence a commitment that, starting from 2027, no less than 5% of the gross domestic product projected for the respective year be allocated to national defence.
In his letter to the Presidium of the Saeima, the President draws attention to the fact that the international security situation has changed significantly and irreversibly since 24 February 2022, when the Russian Federation carried out an illegal and unprovoked full-scale military invasion of Ukraine. The threat posed by Russia will persist even after the conclusion or freezing of the war in Ukraine – Russia will continue to develop its military capabilities and will pose a substantial threat to European countries and the North Atlantic Treaty Organization (NATO).
“The aim of the National Defence Financing Law is to purposefully enhance national defence capabilities through financial measures, so that Latvia, as a member of the North Atlantic Treaty Organization (NATO), fulfils its obligations within the framework of collective defence, while also providing a basis for the implementation of long-term military capability development projects and thereby supporting Latvia’s engagement in European and transatlantic security structures. Currently, the Law instructs the Cabinet of Ministers, when preparing draft laws on the state budget for the respective year and the medium-term budget framework, to provide for defence funding in 2027 and subsequent years of no less than 3 percent of the gross domestic product projected for the respective year. This statutory funding target for national defence is no longer relevant or appropriate,” emphasised President Rinkēvičs in his letter.
“Fulfilling Latvia’s commitments to NATO, strengthening the capabilities of the National Armed Forces in line with NATO capability targets, ensuring Latvia’s provision of host nation support to Allied forces, and developing the defence industry are not possible without a purposeful increase in defence funding. It is essential for Latvia to ensure a consistent long-term increase in defence expenditure in order to implement the commitment undertaken by NATO heads of state and government at their meeting in The Hague, the Netherlands, on 25 June 2025, to invest 5% of GDP annually in defence by 2035. Based on current geopolitical developments and the need to strengthen national defence capabilities, it is necessary to ensure a predictable level of defence funding, including allocating no less than 5% of the projected gross domestic product for the respective year in 2027 and in subsequent years, thereby meeting NATO’s established criteria,” the letter states.